The following is adapted from Inheriting Chaos with Compassion.
When a loved one passes away, the last thing you want to think about is money. The unfortunate reality is that life moves on, and sooner or later, you’re going to be faced with the task of assessing your finances and re-evaluating your money mindset.
Let me share a story about one of my clients, Angela, that illustrates this process.
Angela came to me a year and a half before her husband died.
George had Parkinson’s, and when I met them, George still held his job at a local hardware store and could still drive. They had already made some decisions: they had downsized to an apartment, so they wouldn’t have to take care of a home, and Angela was getting ready to retire early. She knew George would need more and more care as his illness progressed, and she was afraid to leave him home alone.
Angela wanted to understand their finances, and we worked together to streamline their eight retirement accounts and plan their financial road ahead.
Taking in the full picture of their income, their expenses, and George’s care needs, we evaluated the circumstances to see what Angela could spend sustainably and what decisions made the most sense for them. We envisioned a new financial future for Angela after her husband’s death, and explored by asking two key questions:
What did Angela want out of life next?
What could her finances support?
With these questions, we waded into new waters. Angela is fit and likes to hike. She has good friends, but she didn’t live near them. We began to focus our financial planning around where she might live and what she might be able to do.
In this article, we’ll walk through the process of to redefining your life after the death of a loved one, looking less at numbers and more at the mindset shift that occurs.
Start with Joy
When I begin working with a client, I don’t just want to know about their finances; I want to know about their whole life. I start these conversations with lots of questions.
I ask about my clients’ relationships, families, and activities. These factors influence where they live, how they spend their time, and ultimately, how they spend their money. I ask a variety of questions to understand what is important to them, including:
- Where does your family live?
- Who is important to you? Where do they live?
- What do you enjoy doing most?
- What keeps you active?
- Where do you like to travel? Who would you like to travel with?
- What kinds of activities would you like to try?
I want to understand where my client found joy before their circumstances changed. We flesh out the parts of their lives that aren’t directly connected to the person they lost.
Once they begin to imagine what they want their life to look like, we construct a financial plan to support that future. Money is a tool to support those visions and dreams.
In Angela’s case, it took time for her to figure out what she wanted.
All of her time leading up to her husband’s death was consumed by organizing their finances and dealing with the mounting stress of his illness. After his death, she had a whole new set of decisions to make about how she wanted to live. We worked together to determine what was feasible in her finances, and Angela is considering moving to another state to be near the mountains and her closest friends.
Connecting with People
It’s important to recognize how our emotions guide our financial lives. Especially after losing a loved one, our emotions can affect how we see our future and the decisions we make as a result. Let me give you an example from my own life.
I don’t recommend making rash, impulsive financial decisions, but after my husband Eric died, my daughter and I went to Disney World twice in one year.
The first trip was over my daughter’s spring break, and we discovered how stealthy we could be on vacation with just us. There was no negotiating with a group, no need to coordinate with others, and we were able to follow our whims.
Then, just a few weeks later, my sister-in-law said she was taking her kids to Disney. I told her how much fun I’d just had with my daughter and how I wished we could go.
Then I stopped myself. We could go. It’s just us. I took my daughter out of school, and we went to Disney World again. It was an expensive, impulsive decision, and it was a beautiful way to live on the edge for a moment and experience joy together.
Losing a loved one can sometimes mean losing connection with friends or family members. A friend told me recently that she lost all of her friends when her husband died, because they were all connections they’d made as a couple.
Similarly, I’ve learned that travel is not a solitary activity for most people, but often when I ask a client who they might like to travel with, they can think of girlfriends, siblings, and other family members that they’re interested in connecting with. Part of the journey after losing a loved one is making connections and trying new things.
A girlfriend and I went to a “paint your pet” night, something I would normally not do, and it was hysterical. I don’t have an artistic bone in my body, but my friend and I had a great time painting pictures of our pets on canvases.
On this journey into a new lifestyle, we need cheerleaders. Unless a client has a crazy financial decision in mind, I encourage them to follow their wild ideas.
Money is a tool to support their visions, dreams, and goals in life.
Let Your Goals Guide You
Speaking of goals, yours aren’t static; they change in response to the stages and events of your life. Taking time to revisit your goals after a tragedy can help you manage the chaos and set up a clearer financial picture for the future.
If, like Angela, the time leading up to a loved one’s death is defined by providing the best possible care for them, your goals and plans will change once they pass.
When that day comes, it’s OK to start thinking about new goals for your life.
That’s where a financial advisor can also help, not just in setting up a financial plan to help you achieve those goals, but also pushing you to dream a little bigger if you’re scared to spend money or don’t feel right about enjoying life.
A financial advisor can help you create goals that will guide the rest of your life.
For more advice on navigating your financial life after the death of a loved one, you can find Inheriting Chaos with Compassion on Amazon.
Jennifer Luzzatto is a Chartered Financial Analyst®, a Certified Financial Planner®, and a NAPFA registered financial advisor. She began her career in financial services thirty years ago as a fixed-income trader in a regional brokerage firm and went on to manage personal trust accounts, institutional portfolios, and a municipal bond mutual fund at a commercial bank. In 1999, she founded Summit Financial Partners, transitioning from banking to financial planning and investment advisory services. Jennifer holds a BA in Psychology and an MBA from the University of Richmond. She lives in Richmond, Virginia, with her daughter and their dog.
Inheriting Chaos with Compassion
Written by Jennifer Luzzatto, President of Summit Financial Partners
Inheriting Chaos with Compassion is an invaluable and compassionate handbook that covers power-of-attorney, executor responsibilities, and all aspects of settling an estate, while providing essential information about bank accounts, investments, and any professional service you might require.
Inspired by Jennifer’s personal experience and informed by her three decades in the financial services industry, Inheriting Chaos with Compassion will get you through the tangled financial legacy your loved one left behind.